PITTSBURGH & CHICAGO--(BUSINESS WIRE)--
The Kraft Heinz Company (NASDAQ: KHC) ("Kraft Heinz" or the "Company")
today reported third quarter 2016 financial results that reflected a
combination of significant gains from cost savings and the redemption of
preferred stock, as well as lower taxes versus the prior year period.

"Overall, our third quarter results are a good representation of where
we are as a company," said Kraft Heinz CEO Bernardo Hees. "While our
financial performance is respectable, we continue to have the
opportunity to improve our offerings and retail execution in several key
markets and take our brands to places they don't currently compete. Our
focus now is to finish 2016 strong and set the stage for another year of
strong, profitable growth in 2017."

Q3 2016 Financial Summary

For the Three Months Ended

Year-over-year Change

October 2,

September 27,

2016

2015

Actual

Currency

Divestitures

Organic

(in millions, except per share data)

GAAP net sales

$

6,267

$

6,120

2.4

%

GAAP operating income

1,413

399

254.1

%

GAAP net income/(loss) attributable to common shareholders

842

(303

)

nm

GAAP diluted EPS

$

0.69

$

(0.27

)

nm

Pro forma net sales(2)

$

6,267

$

6,363

(1.5

)%

(0.5

) pp

—

(1.0

)%

Adjusted EBITDA(1,2)

1,803

1,482

21.7

%

Adjusted EPS(1,2)

$

0.83

$

0.44

88.6

%

Net sales were $6.3 billion, down 1.5 percent versus pro forma net sales
for the year-ago period, including a negative 0.5 percentage point
impact from currency. Organic Net Sales decreased 1.0 percent versus the
year-ago period. Pricing decreased 0.7 percentage points driven by key
commodity(3) deflation in the United States, primarily in
meats and coffee, and coffee in Canada, as well as higher promotional
expenses in Europe. Volume/mix decreased 0.3 percentage points primarily
due to lower shipments across several categories, particularly cold
cuts, foodservice and nuts in the United States. This was partially
offset by growth driven by innovation in Lunchables and the
macaroni and cheese portfolio, as well as gains in coffee in the United
States and growth in condiments and sauces globally.

Net income attributable to common shareholders increased to $842 million
and GAAP diluted EPS increased to $0.69. Adjusted EBITDA increased 21.7
percent versus the year-ago period to $1.8 billion, including a negative
0.8 percentage point impact from currency, driven by gains from cost
savings initiatives(4) and favorable pricing net of key
commodity costs. Adjusted EPS increased 88.6 percent versus the year-ago
period to $0.83, mainly reflecting growth in Adjusted EBITDA, the
refinancing of Series A Preferred Stock and lower taxes.

Q3 2016 Business Segment Highlights

United States

For the Three Months Ended

Year-over-year Change

October 2,

September 27,

2016

2015

Actual

Currency

Divestitures

Organic

(in millions)

Pro forma net sales(2,5)

$

4,395

$

4,449

(1.2

)%

—

—

(1.2

)%

Segment Adjusted EBITDA(1,2,5)

1,349

1,033

30.6

%

United States net sales were $4.4 billion, down 1.2 percent versus pro
forma net sales for the year-ago period. Pricing decreased 0.7
percentage points driven by deflation in key commodities, primarily in
meats and coffee. Volume/mix was 0.5 percentage points lower reflecting
growth from innovation in Lunchables and themacaroni and
cheese portfolio, as well as gains from coffee, that were more than
offset by declines in cold cuts, foodservice and nuts.

Europe net sales were $513 million, down 14.5 percent versus pro forma
net sales for the year-ago period, including a negative 6.7 percentage
point impact from currency. Organic Net Sales were 7.8 percent lower
than the year-ago period. Pricing was down 2.9 percentage points
primarily due to the timing of promotional expenses versus the prior
year. Volume/mix decreased 4.9 percentage points reflecting a
combination of shipment timing versus the prior year as well as ongoing
consumption weakness across several categories, primarily in the UK and
the Netherlands.

Europe Segment Adjusted EBITDA decreased 17.9 percent versus the
year-ago period to $183 million, including a negative 8.5 percentage
point impact from currency, as manufacturing savings were more than
offset by a combination of unfavorable volume/mix, lower pricing and
increased marketing investments.

Rest of World Segment Adjusted EBITDA decreased 1.3 percent versus the
year-ago period to $150 million, despite a positive 2.6 percentage point
impact from currency. Excluding the impact from currency, Segment
Adjusted EBITDA declined as organic sales growth was more than offset by
a combination of higher input costs in local currency and investments
behind new product initiatives.

End Notes

(1)

Organic Net Sales, Adjusted EBITDA and Adjusted EPS are non-GAAP
financial measures. Please see discussion of non-GAAP financial
measures and the reconciliations at the end of this press release
for more information.

(2)

Pro forma net sales, Adjusted EBITDA and Adjusted EPS for the three
months ended September 27, 2015 include the operating results of
Kraft on a pro forma basis, as if Kraft had been acquired as of
December 30, 2013. There are no pro forma adjustments for the three
months ended October 2, 2016 as Kraft and Heinz were a combined
company for the entire period. Please see discussion of the
unaudited pro forma condensed combined financial information at the
end of this press release for more information.

(3)

The Company's key commodities in the United States and Canada are
dairy, meat, coffee and nuts.

In the first quarter of 2016, the Company moved certain of the
historical Kraft export businesses from the Company's United States
segment to its Rest of World and Europe segments to align with its
long-term go-to-market strategies. For the three months ended
September 27, 2015, this change resulted in the reclassification of
$92 million of pro forma net sales from the United States segment to
the Rest of World segment ($91 million) and Europe segment ($1
million), as well as $28 million of Segment Adjusted EBITDA from the
United States segment to the Rest of World segment ($27 million) and
Europe ($1 million).

(6)

Rest of World is comprised of three operating segments: Asia
Pacific; Latin America; and, Russia, India, the Middle East and
Africa ("RIMEA").

Webcast and Conference Call Information

A webcast of The Kraft Heinz Company's third quarter 2016 earnings
conference call will be available at ir.kraftheinzcompany.com.
The call begins today at 5:00 p.m. Eastern time.

ABOUT THE KRAFT HEINZ COMPANY

The Kraft Heinz Company (NASDAQ: KHC) is the fifth-largest food and
beverage company in the world. A globally trusted producer of delicious
foods, The Kraft Heinz Company provides high quality, great taste and
nutrition for all eating occasions whether at home, in restaurants or on
the go. The Company's iconic brands include Kraft, Heinz, ABC,
Capri Sun, Classico, Jell-O, Kool-Aid, Lunchables, Maxwell
House, Ore-Ida, Oscar Mayer, Philadelphia, Planters, Plasmon, Quero,
Weight WatchersSmart Ones and Velveeta. The Kraft
Heinz Company is dedicated to the sustainable health of our people, our
planet and our Company. For more information, visit www.kraftheinzcompany.com.

Forward-Looking Statements

This press release contains a number of forward-looking statements.
Words such as "expect," "continue," "improve," "believe," "will,"
"focus," and variations of such words and similar expressions are
intended to identify forward-looking statements. Examples of
forward-looking statements include, but are not limited to, statements
regarding the Company's plans, investments, execution, growth and
integration. These forward-looking statements are not guarantees of
future performance and are subject to a number of risks and
uncertainties, many of which are difficult to predict and beyond the
Company's control.

Important factors that may affect the Company's business and operations
and that may cause actual results to differ materially from those in the
forward-looking statements include, but are not limited to, increased
competition; the Company's ability to maintain, extend and expand its
reputation and brand image; the Company's ability to differentiate its
products from other brands; the consolidation of retail customers; the
Company's ability to predict, identify and interpret changes in consumer
preferences and demand; the Company's ability to drive revenue growth in
its key product categories, increase its market share or add products;
an impairment of the carrying value of goodwill or other
indefinite-lived intangible assets; volatility in commodity, energy and
other input costs; changes in the Company's management team or other key
personnel; the Company's inability to realize the anticipated benefits
from the Company's cost savings initiatives; changes in relationships
with significant customers and suppliers; execution of the Company's
international expansion strategy; changes in laws and regulations; legal
claims or other regulatory enforcement actions; product recalls or
product liability claims; unanticipated business disruptions; failure to
successfully integrate the business and operations of the Company in the
expected time frame; the Company's ability to complete or realize the
benefits from potential and completed acquisitions, alliances,
divestitures or joint ventures; economic and political conditions in the
nations in which the Company operates; the volatility of capital
markets; increased pension, labor and people-related expenses;
volatility in the market value of all or a portion of the derivatives
that the Company uses; exchange rate fluctuations; disruptions in
information technology networks and systems; the Company's inability to
protect intellectual property rights; impacts of natural events in the
locations in which the Company or its customers, suppliers or regulators
operate; the Company's indebtedness and ability to pay such
indebtedness; tax law changes or interpretations; and other factors. For
additional information on these and other factors that could affect the
Company's forward-looking statements, see the Company's risk factors, as
they may be amended from time to time, set forth in its filings with the
Securities and Exchange Commission (the "SEC"). The Company disclaims
and does not undertake any obligation to update or revise any
forward-looking statement in this press release, except as required by
applicable law or regulation.

Unaudited Pro Forma Condensed Combined Financial Information

The unaudited pro forma condensed combined financial information (the
"pro forma financial information") presented in this release illustrates
the estimated effects of the merger (the "2015 Merger") consummated on
July 2, 2015 (the "2015 Merger Date") of Kraft Foods Group, Inc.
("Kraft") with and into a wholly-owned subsidiary of H.J. Heinz Holding
Corporation ("Heinz"), the related equity investments and common stock
conversion, the application of the acquisition method of accounting, and
conformance of accounting policies. The pro forma financial information
is presented as if the 2015 Merger had been consummated on December 30,
2013, the first business day of the Company's 2014 fiscal year, and
combines the historical results of Kraft and Heinz. For additional
information on the 2015 Merger, please refer to the Company's filings
with the SEC.

The pro forma financial information was prepared using the acquisition
method of accounting, which requires, among other things, that assets
acquired and liabilities assumed in a business combination be recognized
at their fair values as of the completion of the acquisition. The
Company utilized estimated fair values at the 2015 Merger Date to
allocate the total consideration exchanged to the net tangible and
intangible assets acquired and liabilities assumed. Such allocation was
final as of July 3, 2016.

The historical consolidated financial statements have been adjusted in
the accompanying pro forma financial information to give effect to
unaudited pro forma events that are (1) directly attributable to the
2015 Merger, (2) factually supportable and (3) expected to have a
continuing impact on the results of operations of the combined company.

This pro forma financial information is not necessarily indicative of
what the Company's results of operations actually would have been had
the 2015 Merger been completed as of December 30, 2013. In addition, the
pro forma financial information is not indicative of future results or
current financial conditions and does not reflect any additional
anticipated synergies, operating efficiencies, cost savings or any
integration costs that may result from the 2015 Merger.

This pro forma financial information should be read in conjunction with
historical financial statements and accompanying notes filed with the
SEC. Certain reclassifications have been made to the historical Kraft
and Heinz results to align accounting policies and eliminate
intercompany sales in all periods presented.

Non-GAAP Financial Measures

To supplement the financial information, the Company has presented
Organic Net Sales, Adjusted EBITDA, and Adjusted EPS, which are
considered non-GAAP financial measures. The non-GAAP financial measures
provided should be viewed in addition to, and not as an alternative for,
financial measures prepared in accordance with accounting principles
generally accepted in the United States of America ("GAAP") that are
presented in this press release. The non-GAAP financial measures
presented may differ from similarly titled non-GAAP financial measures
presented by other companies, and other companies may not define these
non-GAAP financial measures in the same way. These measures are not
substitutes for their comparable GAAP financial measures, such as net
sales, net income/(loss), diluted earnings per share, or other measures
prescribed by GAAP, and there are limitations to using non-GAAP
financial measures.

Management uses these non-GAAP financial measures to assist in comparing
the Company's performance on a consistent basis for purposes of business
decision making by removing the impact of certain items that management
believes do not directly reflect the Company's underlying operations.
Management believes that presenting the Company's non-GAAP financial
measures is useful to investors because it (i) provides investors with
meaningful supplemental information regarding financial performance by
excluding certain items, (ii) permits investors to view performance
using the same tools that management uses to budget, make operating and
strategic decisions, and evaluate historical performance, and (iii)
otherwise provides supplemental information that may be useful to
investors in evaluating the Company's results. The Company believes that
the presentation of these non-GAAP financial measures, when considered
together with the corresponding GAAP financial measures and the
reconciliations to those measures, provides investors with additional
understanding of the factors and trends affecting the Company's business
than could be obtained absent these disclosures.

Organic Net Sales is defined as net sales excluding, when they occur,
the impact of acquisitions, currency, divestitures and a 53rd
week of shipments. The Company calculates the impact of currency on net
sales by holding exchange rates constant at the previous year's exchange
rate, with the exception of Venezuela following the Company's June 28,
2015 currency devaluation, for which the Company calculates the previous
year's results using the current year's exchange rate. Organic Net Sales
for any period prior to the 2015 Merger Date includes the operating
results of Kraft on a pro forma basis, as if Kraft had been acquired as
of December 30, 2013. Organic Net Sales is a tool that can assist
management and investors in comparing the Company's performance on a
consistent basis by removing the impact of certain items that management
believes do not directly reflect the Company's underlying operations.

Adjusted EBITDA is defined as net income/(loss) from continuing
operations before interest expense, other expense/(income), net,
provision for/(benefit from) income taxes; in addition to these
adjustments, the Company excludes, when they occur, the impacts of
depreciation and amortization (excluding integration and restructuring
expenses) (including amortization of postretirement benefit plans prior
service credits), integration and restructuring expenses, merger costs,
unrealized losses/(gains) on commodity hedges, impairment losses,
losses/(gains) on the sale of a business, nonmonetary currency
devaluation, and equity award compensation expense (excluding
integration and restructuring expenses). Adjusted EBITDA for any period
prior to the 2015 Merger Date includes the operating results of Kraft on
a pro forma basis, as if Kraft had been acquired as of December 30,
2013. The Company also presents Adjusted EBITDA on a constant currency
basis. The Company calculates the impact of currency on Adjusted EBITDA
by holding exchange rates constant at the previous year's exchange rate,
with the exception of Venezuela following the Company's June 28, 2015
devaluation of the Venezuelan bolivar and remeasurement of assets and
liabilities of its Venezuelan subsidiary, for which it calculates the
previous year's results using the current year's exchange rate. Adjusted
EBITDA is a tool that can assist management and investors in comparing
the Company's performance on a consistent basis by removing the impact
of certain items that management believes do not directly reflect the
Company's underlying operations.

Adjusted EPS is defined as diluted earnings per share excluding, when
they occur, the impacts of integration and restructuring expenses,
merger costs, unrealized losses/(gains) on commodity hedges, impairment
losses, losses/(gains) on the sale of a business, and nonmonetary
currency devaluation, and including when they occur, adjustments to
reflect preferred stock dividend payments on an accrual basis. Adjusted
EPS for any period prior to the 2015 Merger Date includes the operating
results of Kraft on a pro forma basis, as if Kraft had been acquired as
of December 30, 2013. The Company believes Adjusted EPS provides
important comparability of underlying operating results, allowing
investors and management to assess operating performance on a consistent
basis.

See the attached schedules for supplemental financial data, which
includes the financial information, the non-GAAP financial measures and
corresponding reconciliations for the relevant periods.

Schedule 1

The Kraft Heinz Company

Condensed Consolidated Statements of Income

(in millions, except per share data)

(Unaudited)

For the Three Months

For the Nine Months

Ended

Ended

October 2,

September

October 2,

September

2016

27, 2015

2016

27, 2015

Net sales

$

6,267

$

6,120

$

19,630

$

11,214

Cost of products sold

4,049

4,492

12,503

7,857

Gross profit

2,218

1,628

7,127

3,357

Selling, general and administrative expenses

805

1,229

2,565

2,005

Operating income

1,413

399

4,562

1,352

Interest expense

311

460

824

1,055

Other expense/(income), net

(3

)

108

(5

)

314

Income/(loss) before income taxes

1,105

(169

)

3,743

(17

)

Provision for/(benefit from) income taxes

262

(49

)

1,045

(16

)

Net income/(loss)

843

(120

)

2,698

(1

)

Net income/(loss) attributable to noncontrolling interest

1

3

10

10

Net income/(loss) attributable to Kraft Heinz

842

(123

)

2,688

(11

)

Preferred dividends(a)

—

180

180

540

Net income/(loss) attributable to common shareholders

$

842

$

(303

)

$

2,508

$

(551

)

Basic shares outstanding

1,218

1,142

1,216

633

Diluted shares outstanding

1,228

1,142

1,226

633

Per share data applicable to common shareholders:

Basic earnings/(loss) per share

$

0.69

$

(0.27

)

$

2.06

$

(0.87

)

Diluted earnings/(loss) per share

0.69

(0.27

)

2.05

(0.87

)

*

The consolidated statements of income for the three and nine months
ended September 27, 2015 reflect the results for Heinz and the
results of Kraft Heinz for the period after the 2015 Merger occurred
on July 2, 2015.

(a)

In connection with the December 8, 2015 Common Stock dividend
declaration, the Company was required to accelerate payment of the
Series A Preferred Stock dividend from March 7, 2016 to December 8,
2015. Accordingly, there were no cash distributions related to the
Company's Series A Preferred Stock in the first quarter of 2016.
Additionally, as the Series A Preferred Stock was redeemed on June
7, 2016, there were no cash distributions in the third quarter of
2016, resulting in cash distributions of $180 million in the nine
months ended October 2, 2016 compared to $540 million in the nine
months ended September 27, 2015.

Schedule 2

The Kraft Heinz Company

Pro Forma Condensed Combined Statements of Income(a)

(in millions, except per share data)

(Unaudited)

For the Three Months

For the Nine Months

Ended

Ended

October 2,

September

October 2,

September

2016

27, 2015

2016

27, 2015

Net sales

$

6,267

$

6,363

$

19,630

$

20,323

Cost of products sold(b)

4,049

4,314

12,503

13,579

Gross profit

2,218

2,049

7,127

6,744

Selling, general and administrative expenses(c)

805

1,397

2,565

3,496

Operating income

1,413

652

4,562

3,248

Interest expense

311

460

824

1,262

Other expense/(income), net

(3

)

108

(5

)

298

Income/(loss) before income taxes

1,105

84

3,743

1,688

Provision for/(benefit from) income taxes

262

69

1,045

562

Net income/(loss)

843

15

2,698

1,126

Net income/(loss) attributable to noncontrolling interest

1

3

10

10

Net income/(loss) attributable to Kraft Heinz

842

12

2,688

1,116

Preferred dividends(d)

—

180

180

540

Net income/(loss) attributable to common shareholders

$

842

$

(168

)

$

2,508

$

576

Basic common shares outstanding

1,218

1,213

1,216

1,198

Diluted common shares outstanding

1,228

1,213

1,226

1,222

Per share data applicable to common shareholders:

Basic earnings per share

$

0.69

$

(0.14

)

$

2.06

$

0.48

Diluted earnings per share

0.69

(0.14

)

2.05

0.47

(a)

There are no pro forma adjustments in the three and nine months
ended October 2, 2016 as Kraft and Heinz were a combined company for
the entire period. Refer to Schedules 10 and 11 for additional
information on the pro forma adjustments for the three and nine
months ended September 27, 2015.

(b)

Integration and restructuring expenses in cost of products sold were
as follows: $152 million in the three months ended October 2, 2016
($102 million after-tax), $161 million in the three months ended
September 27, 2015 ($104 million after-tax), $532 million in the
nine months ended October 2, 2016 ($361 million after-tax), and $301
million in the nine months ended September 27, 2015 ($203 million
after-tax).

(c)

Integration and restructuring expenses in selling, general and
administrative expenses were as follows: $85 million in the three
months ended October 2, 2016 ($57 million after-tax), $321 million
in the three months ended September 27, 2015 ($214 million
after-tax), $249 million in the nine months ended October 2, 2016
($169 million after-tax), and $380 million in the nine months ended
September 27, 2015 ($256 million after-tax).

(d)

In connection with the December 8, 2015 Common Stock dividend
declaration, the Company was required to accelerate payment of the
Series A Preferred Stock dividend from March 7, 2016 to December 8,
2015. Accordingly, there were no cash distributions related to the
Company's Series A Preferred Stock in the first quarter of 2016.
Additionally, as the Series A Preferred Stock was redeemed on June
7, 2016, there were no cash distributions in the third quarter of
2016, resulting in cash distributions of $180 million in the nine
months ended October 2, 2016 compared to $540 million in the nine
months ended September 27, 2015.

Schedule 3

The Kraft Heinz Company

Reconciliation of Pro Forma Net Sales to Organic Net Sales

For the Three Months Ended

(dollars in millions)

(Unaudited)

Pro Forma

Impact of

Impact of

Organic

Net Sales(a)

Currency

Divestitures

Net Sales

Price

Volume/Mix

October 2, 2016

United States

$

4,395

$

—

$

—

$

4,395

Canada

550

—

—

550

Europe

513

(40

)

—

553

Rest of World

809

8

—

801

$

6,267

$

(32

)

$

—

$

6,299

September 27, 2015

United States(b)

$

4,449

$

—

$

—

$

4,449

Canada

539

—

—

539

Europe(b)

600

—

—

600

Rest of World(b)

775

2

—

773

$

6,363

$

2

$

—

$

6,361

Year-over-year growth rates

United States(b)

(1.2

)%

—

—

(1.2

)%

(0.7

) pp

(0.5

) pp

Canada

2.0

%

—

—

2.0

%

(1.4

) pp

3.4

pp

Europe(b)

(14.5

)%

(6.7

) pp

—

(7.8

)%

(2.9

) pp

(4.9

) pp

Rest of World(b)

4.4

%

0.8

pp

—

3.6

%

1.9

pp

1.7

pp

Kraft Heinz

(1.5

)%

(0.5

) pp

—

(1.0

)%

(0.7

) pp

(0.3

) pp

(a)

There are no pro forma adjustments in the three and nine months
ended October 2, 2016 as Kraft and Heinz were a combined company for
the entire period.

(b)

In the first quarter of 2016, the Company moved certain of the
historical Kraft export businesses from the Company's United States
segment to its Rest of World and Europe segments to align with its
long-term go-to-market strategies. This change resulted in the
reclassification of $92 million of pro forma net sales for the three
months ended September 27, 2015 from the United States segment to
the Rest of World segment ($91 million) and Europe segment ($1
million).

Schedule 4

The Kraft Heinz Company

Reconciliation of Pro Forma Net Sales to Organic Net Sales

For the Nine Months Ended

(dollars in millions)

(Unaudited)

Pro Forma

Impact of

Impact of

Organic

Net Sales(a)

Currency

Divestitures

Net Sales

Price

Volume/Mix

October 2, 2016

United States

$

13,802

$

—

$

—

$

13,802

Canada

1,692

(89

)

—

1,781

Europe

1,644

(77

)

—

1,721

Rest of World

2,492

(117

)

—

2,609

$

19,630

$

(283

)

$

—

$

19,913

September 27, 2015

United States(b)

$

13,939

$

—

$

—

$

13,939

Canada

1,754

—

—

1,754

Europe(b,c)

1,847

—

43

1,804

Rest of World(b)

2,783

346

—

2,437

$

20,323

$

346

$

43

$

19,934

Year-over-year growth rates

United States(b)

(1.0

)%

—

—

(1.0

)%

0.2

pp

(1.2

) pp

Canada

(3.5

)%

(5.0

) pp

—

1.5

%

1.9

pp

(0.4

) pp

Europe(b,c)

(11.0

)%

(4.2

) pp

(2.2

) pp

(4.6

)%

(2.7

) pp

(1.9

) pp

Rest of World(b)

(10.5

)%

(17.6

) pp

—

7.1

%

3.1

pp

4.0

pp

Kraft Heinz

(3.4

)%

(3.1

) pp

(0.2

) pp

(0.1

)%

0.5

pp

(0.6

) pp

(a)

There are no pro forma adjustments in the nine months ended October
2, 2016 as Kraft and Heinz were a combined company for the entire
period.

(b)

In the first quarter of 2016, the Company moved certain of the
historical Kraft export businesses from the Company's United States
segment to its Rest of World and Europe segments to align with its
long-term go-to-market strategies. This change resulted in the
reclassification of $263 million of pro forma net sales for the nine
months ended September 27, 2015 from the United States segment to
the Rest of World segment ($261 million) and Europe segment ($2
million).

(c)

The Company increased Europe Organic Net Sales by $2 million from
the amount previously published for the nine months ended September
27, 2015 to reflect a correction to the Impact of Divestitures.

There are no pro forma adjustments in the nine months ended October
2, 2016 as Kraft and Heinz were a combined company for the entire
period.

(b)

In the first quarter of 2016, the Company moved certain historical
Kraft export businesses from the Company's United States segment to
its Rest of World and Europe segments to align with its long-term
go-to-market strategies. For the three months ended September 27,
2015, this change resulted in the reclassification of $28 million of
Segment Adjusted EBITDA from the United States segment to the Rest
of World segment ($27 million) and Europe segment ($1 million). For
the nine months ended September 27, 2015, this change resulted in
the reclassification of $73 million of Segment Adjusted EBITDA from
the United States segment to the Rest of World segment ($72 million)
and Europe segment ($1 million).

There are no pro forma adjustments in the three and nine months
ended October 2, 2016 as Kraft and Heinz were a combined company for
the entire period.

(b)

In the first quarter of 2016, the Company moved certain historical
Kraft export businesses from the Company's United States segment to
its Rest of World and Europe segments to align with its long-term
go-to-market strategies. For the three months ended September 27,
2015, this change resulted in the reclassification of $28 million of
Segment Adjusted EBITDA from the United States segment to the Rest
of World segment ($27 million) and Europe segment ($1 million).

There are no pro forma adjustments in the nine months ended October
2, 2016 as Kraft and Heinz were a combined company for the entire
period.

(b)

In the first quarter of 2016, the Company moved certain historical
Kraft export businesses from the Company's United States segment to
its Rest of World and Europe segments to align with its long-term
go-to-market strategies. For the nine months ended September 27,
2015, this change resulted in the reclassification of $73 million of
Segment Adjusted EBITDA from the United States segment to the Rest
of World segment ($72 million) and Europe segment ($1 million).

Schedule 8

The Kraft Heinz Company

Reconciliation of Pro Forma Diluted EPS to Adjusted EPS

(Unaudited)

For the Three Months

For the Nine Months

Ended

Ended

October 2,

September

October 2,

September

2016

27, 2015

2016

27, 2015

Pro forma diluted EPS(a)

$

0.69

$

(0.14

)

$

2.05

$

0.47

Integration and restructuring expenses(b)(c)

0.13

0.27

0.43

0.38

Merger costs(b)(d)

—

0.31

0.02

0.48

Unrealized losses/(gains) on commodity hedges(b)(e)

0.01

—

(0.02

)

(0.01

)

Impairment losses(b)(e)

—

—

0.03

0.03

Losses/(gains) on sale of business(b)(e)

—

—

—

(0.01

)

Nonmonetary currency devaluation(b)(f)

—

—

—

0.23

Preferred dividend adjustment(g)

—

—

(0.10

)

—

Adjusted EPS

$

0.83

$

0.44

$

2.41

$

1.57

(a)

There are no pro forma adjustments in the three and nine months
ended October 2, 2016, as Kraft and Heinz were a combined company
for the entire period.

(b)

Income tax expense associated with these items is based on
applicable jurisdictional tax rates and deductibility assessment of
individual items.

(c)

Integration and restructuring expenses include the following gross
expenses:

•

Expenses recorded in cost of products sold were $152 million for
the three months and $532 million for the nine months ended
October 2, 2016 and $161 million for the three months and $301
million for the nine months ended September 27, 2015;

•

Expenses recorded in SG&A were $85 million for the three months
and $249 million for the nine months ended October 2, 2016 and
$321 million for the three months and $380 million for the nine
months ended September 27, 2015

•

Expenses recorded in other expense/(income), net, were $2 million
for the three and nine months ended October 2, 2016 (there were no
such expenses for the three and nine months ended September 27,
2015).

(d)

Merger costs include the following gross expenses:

•

Expenses recorded in cost of products sold were $1 million for the
three months and $2 million for the nine months ended October 2,
2016, and $4 million for the three and nine months ended September
27, 2015;

•

Expenses recorded in SG&A were $3 million for the three months and
$31 million for the nine months ended October 2, 2016 and $135
million for the three months and $189 million for the nine months
ended September 27, 2015;

•

Expenses recorded in interest expense were $207 million for the
three months and $466 million for the nine months ended September
27, 2015 (there were no such expenses for the three and nine
months ended October 2, 2016); and,

•

Expenses recorded in other expense/(income), net, were $113
million for the three and $139 million for the nine months ended
September 27, 2015 (there were no such expenses for the three and
nine months ended October 2, 2016).

(e)

Refer to the reconciliation of pro forma net income/(loss) to
Adjusted EBITDA for the related gross expenses.

(f)

Nonmonetary currency devaluation includes the following gross
expenses/(income):

•

Expenses recorded in cost of products sold of $1 million for the
three months and $4 million for the nine months ended October 2,
2016 and $49 million the nine months ended September 27, 2015
(there were no such expenses for the three months ended September
27, 2015); and,

•

Expenses/(income) recorded in other expense/(income), net,
including income of $6 million for the three months and expense of
$1 million for the nine months ended October 2, 2016 and expense
of $234 million for the nine months ended September 27, 2015
(there were no such expenses for the three months ended September
27, 2015).

(g)

For Adjusted EPS, the Company presents the impact of the Series A
Preferred Stock dividend payments on an accrual basis.
Accordingly, the Company includes adjustments to EPS to include
$180 million of Series A Preferred Stock dividends during the
first quarter of 2016 (to reflect the March 7, 2016 Series A
Preferred Stock dividend that was paid in December 2015) and to
exclude $51 million of Series A Preferred Stock dividends during
the second quarter of 2016 (to reflect that it was redeemed on
June 7, 2016).

Schedule 9

The Kraft Heinz Company

Condensed Consolidated Balance Sheets

(in millions)

(Unaudited)

October 2, 2016

January 3, 2016

ASSETS

Cash and cash equivalents

$

3,920

$

4,837

Trade receivables

855

871

Sold receivables

208

583

Inventories

3,108

2,618

Other current assets

852

871

Total current assets

8,943

9,780

Property, plant and equipment, net

6,490

6,524

Goodwill

44,518

43,051

Intangible assets, net

59,620

62,120

Other assets

1,509

1,498

TOTAL ASSETS

$

121,080

$

122,973

LIABILITIES AND EQUITY

Commercial paper and other short-term debt

$

653

$

4

Current portion of long-term debt

2,047

79

Trade payables

3,456

2,844

Accrued marketing

708

856

Accrued postemployment costs

164

328

Income taxes payable

142

417

Interest payable

311

401

Dividends payable

769

762

Other current liabilities

1,164

1,241

Total current liabilities

9,414

6,932

Long-term debt

29,980

25,151

Deferred income taxes

20,706

21,497

Accrued postemployment costs

2,367

2,405

Other liabilities

745

752

TOTAL LIABILITIES

63,212

56,737

Redeemable noncontrolling interest

—

23

9.00% cumulative compounding preferred stock, Series A

—

8,320

Equity:

Common stock, $0.01 par value

12

12

Additional paid-in capital

58,567

58,375

Retained earnings/(deficit)

374

—

Accumulated other comprehensive income/(losses)

(1,229

)

(671

)

Treasury stock, at cost

(82

)

(31

)

Total shareholders' equity

57,642

57,685

Noncontrolling interest

226

208

TOTAL EQUITY

57,868

57,893

TOTAL LIABILITIES AND EQUITY

$

121,080

$

122,973

Schedule 10

The Kraft Heinz Company

Pro Forma Condensed Combined Statement of Income

For the Three Months Ended September 27, 2015

(in millions, except per share data)

(Unaudited)

Historical

Historical

Pro Forma

Heinz

Kraft

Adjustments

Pro Forma

Net sales

$

6,120

$

243

$

—

$

6,363

Cost of products sold

4,492

169

(347

)

(a)

4,314

Gross profit

1,628

74

347

2,049

Selling, general and administrative expenses

1,229

264

(96

)

(b)

1,397

Operating income

399

(190

)

443

652

Interest expense

460

—

—

460

Other expense/(income), net

108

—

—

108

Income/(loss) before income taxes

(169

)

(190

)

443

84

Provision for/(benefit from) income taxes

(49

)

(52

)

170

(c)

69

Net income/(loss)

(120

)

(138

)

273

15

Net income/(loss) attributable to noncontrolling interest

3

—

—

3

Net income/(loss) attributable to Kraft Heinz

(123

)

(138

)

273

12

Preferred dividends

180

—

—

180

Net income/(loss) attributable to common shareholders

$

(303

)

$

(138

)

$

273

$

(168

)

Basic common shares outstanding

1,213

Diluted common shares outstanding

1,213

Per share data applicable to common shareholders:

Basic earnings per share

$

(0.14

)

Diluted earnings per share

(0.14

)

(a)

Represents the elimination of nonrecurring non-cash costs related to
the fair value adjustment of Kraft's inventory.

Represents the change to align Kraft to Kraft Heinz's accounting
policy for postemployment benefit plans and the elimination of
nonrecurring non-cash costs related to the fair value adjustment of
Kraft's inventory.

Represents the incremental change in interest expense resulting from
the fair value adjustment of Kraft's long-term debt in connection
with the 2015 Merger, including the elimination of the historical
amortization of deferred financing fees and amortization of original
issuance discount.